Clarifications

[efi426hemi]

My friends,

Given that I don’t want to be seen as selfish , below are some clarifications on the selldown deal.  Use or flush.

The Word “Negotiations”

• There are NO, I repeat NO negotiations left between IOC and XOM on the “Initial 4.6 Tcf selldown”
  
  • They may be negotiating the next 4.6 Tcf chunk, ownership in Triceratops or a percentage ownership in the PNG LNG plant, however there are NO negotiations left between IOC and XOM on the “Initial 4.6 Tcf selldown”.

• What “Negotiations” really MEANS is completing the SPA by converting the details from the term sheet into a legally binding document.
  
  • XOM has told IOC that they must use the word “negotiations “ while the legal work is being completed.  I have no idea why, but XOM is OCD and X the big fish in the fish tank….

• The “Negotiations” on the selldown have nothing to do with WHERE the 4.6  Tcf will be processed as this will be determined after the selldown is complete.
  
  • Clearly they have a good idea where that will be now and a betting man would likely choose the 3^rd train at PNG LNG.

• Further clarification on XOM OCD and the SPA "Negotiations"  can be found here

Timing

• Timing is impossible with IOC and the selldown should be treated as a checkbox, however:

• Legal details of agreements of this complexity take anywhere from 17-25 weeks (4-6 months) – or longer.

• IOC announced exclusive “negotiations” with XOM on May 24^th, 11 ½ weeks ago.
  
  • If we use the low end of the 17-25 weeks this puts us in the last week in September for completion.
  • If we use the high end of the 17-25 weeks this puts us in the last week in November for completion.

• Possible unknown delays (I have no idea if these will or will not impact when announcement is made)
  
  • IOC or XOM requiring Board approval before putting pen to paper
  • Official government approval in parliament
  • Organizing a signing ceremony

My Speculation

• From a prior post, I know that IOC and XOM lawyers are extremely motivated to complete the legal documentation as soon as possible and that they are in constant communication and working long hours.

• With that in mind, I am leaning towards the lower end of the 17-25 weeks to hear about completion of selldown deal.
  
  • I would be pleasantly surprised to hear of the deal completion by end of August or early September.

With that all being said I hope IOC is crystal clear in their announcement of the selldown details as I believe they are complex and I am not sure the market will immediately get it.  But that is a post for another day.

Keep it on Ice,

Hemi

[admin]

Very helpful Efi, thanks for sharing

[Petrovale]

Hemi, thanks!
Did you mean this OCD???

Obsessive-compulsive disorder (OCD) is an anxiety disorder characterized by intrusive thoughts that produce uneasiness, apprehension, fear, or worry; by repetitive behaviors aimed at reducing the associated anxiety; or by a combination of such obsessions and compulsions. Symptoms of the disorder include excessive washing or cleaning; repeated checking; extreme hoarding; preoccupation with sexual, violent or religious thoughts; relationship-related obsessions; aversion to particular numbers; and nervous rituals, such as opening and closing a door a certain number of times before entering or leaving a room. These symptoms can be alienating and time-consuming, and often cause severe emotional and financial distress. The acts of those who have OCD may appear paranoid and potentially psychotic. However, OCD sufferers generally recognize their obsessions and compulsions as irrational, and may become further distressed by this realization.

[efi426hemi]

Hey Petro, yup I was referring to obessive compulsive disorder, however after reading your description I am not it fully applies as I don't think XOM performs excessive washing or cleaning.

Keep it on Ice,

Hemi

[calaban48]

Hemi, thanks! Did you mean this OCD??? Obsessive-compulsive disorder (OCD) is an anxiety disorder characterized by ...

Gosh. Maybe I have that ... Could that be why I bought hundreds and hundreds of IOC shares this morning between 9:55 and 10:15 a.m.? <g>

Seriously, thanks for sharing.

[Putncalls]

The MF article today was no accident!

[calaban48]

There are no accidents with InterOil. Remember, 9 million man-hours?

Okay, maybe they don't count shareholders ...

[Putncalls]

I don't remember 9E6 man-hours?

[ebster123]

Hemi, thank you for your post and work, T